ETF Giants Usually Low Cost
All that said, ETFs such as EEM are the exception rather than the rule. Most of the ETF giants are extremely low cost, which is great for long-term investors.
As Matt Hougan, CEO of InsideETFs, often points out, an ETF investor can put together a well-diversified portfolio with exposure to all the major asset classes for next to nothing in fees―as little as 0.08% (8 basis points) according his last tally from November.
Today the world's cheapest ETF portfolio is even cheaper―at least temporarily.
Two REIT ETFs, the Real Estate Select Sector SPDR Fund (XLRE) and the Guggenheim S&P 500 Equal Weight Real Estate ETF (EWRE | D-85), currently have expense ratios of zero, as the funds absorb assets from their sister funds, the Financial Select Sector SPDR Fund (XLF | A-94) and the Guggenheim S&P 500 Equal Weight Financials ETF (RYF | A-84). This is being done to comply with Global Industry Classification Standard sector change, which splits REITs from the broader financial sector.
Fees for XLRE and EWRE will be waived until September, when they will increase, likely making the Schwab U.S. REIT ETF (SCHH | A-88) the low-cost leader when it comes to REIT ETFs once again, with an expense ratio of 0.07%.
As the table below shows, XLRE and EWRE are currently the lowest-cost ETFs on the market, followed by a number of ETFs from Charles Schwab, BlackRock (iShares) and Vanguard, with dirt-cheap expense ratios.
20 Cheapest ETFs
Investors can mix and match these ETFs and others to come up with their own diversified portfolio. Use the ETF.com screener and database to sort ETFs by expense ratio and a host of other categories.
Contact Sumit Roy at [email protected].